DCLG confirms house price falls

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by Kay Murchie

The slump in the housing market has been confirmed today after the Government’s own house price index revealed that prices in July fell for the ninth consecutive month.

The index, which is published by the Department of Communities and Local Government (DCLG), established that prices in July were 0.3% lower compared with the same time last year.

In the last year, house prices have continued to decline with the latest figures from the Halifax showing house prices falling by 1.8% in August, with an annual decline of 12.7%.

The Halifax and Nationwide have reported much sharper falls than the DCLG as their surveys are based on figures on prices quoted when they approve their mortgages.

However, the survey by the DCLG is based on completions and, therefore, a more accurate picture.

As a consequence, economists believe that because of this lag, the Government’s own figures may get worse.

The DCLG now places the average UK property price at £217,171.

On an annual basis, however, prices differ with England seeing a 0.3% fall, Wales and Northern Ireland experiencing falls of 10.3%, while Scotland has bucked the trend and reported a rise of 3.6% over the last year.

A recent announcement from Graham Beale, head of the Nationwide building society, suggested that house prices could end up falling by as much as 25% from its peak seen in autumn last year.

Estate agents have been suffering due to falling house prices with a report last week highlighting that in the three months to August, some of them were selling fewer than one property a week.

The freeze in mortgage lending is also having a devastating affect on the mortgage market. Earlier this month, the Bank of England revealed that the number of mortgage approvals for homebuyers has fallen to 33,000 in July, down by 71% compared with the same period last year.

According to Moneyfacts, there are now 3,748 mortgage deals available compared with 13,027 mortgage products last August.